Toronto and Vancouver have competition when it comes to luxury real estate. According to a new report by Sotheby’s International Realty Canada, year-over-year sales in Montreal skyrocketed in comparison to both cities.
Sales of residential properties over $1 million only rose by five per cent in the first half of 2019. However, Montreal’s year-over-year growth of sales over $4 million were up by a whopping 267 per cent. Eleven properties were sold, compared to three in the first half of 2018.
The city is now “on track to follow record-setting gains in 2017 through 2018 with another banner year,” the report noted.
This data supports Sotheby’s previous prediction that Montreal would become the next hot spot for luxury real estate.
“Montreal has been Canada’s ‘dark horse’ in luxury real estate,” Brad Henderson, Sotheby’s former CEO, said last spring. “For many years, political uncertainty and a stagnant economy tethered performance, but those factors have now dissipated.”
Montreal now has a sellers’ market, which has helped its luxury market growth. And the fact that the city has no foreign buyers’ tax has helped feed demand, too.
“It’s had a significant impact in the marketplace in Vancouver and somewhat in Toronto,” Liza Kaufman, of Sotheby’s Quebec, told CTV. “It has impacted us as well in a beneficial manner.”
Despite this, Toronto did see “healthy” gains in luxury real estate, while Vancouver sales fell. In the first six months of 2019, sales over $1 million in Ontario’s capital rose by 12 per cent compared to 2018. Sales over $4 million on MLS, however, fell by 19 per cent. The report notes that this could be due to more sellers shifting to private sales, since MLS now makes transaction information public.
Vancouver, on the other hand, saw a significant decrease in luxury sales. Sales of $1 million-plus properties fell by 33 per cent from 2018, while $4 million-plus properties dropped by 34 per cent.
The report attributes this to a number of factors, including “tightened mortgage rules, multiple governmental policies and taxes, hesitant sellers and fickle buyers lacking motivation to commit.”